Here at Home-Economic, we want to be rid of the traditional economic analysis where a good or service is only allowed to be public or private. We want you to entertain the idea that goods and services are continuously changing their loyalties. Lighthouses are not only for the common good, and pop cans for instances don’t have to serve just the individual. Let me give you a few examples.
Even though there was political unrest in Ethiopia in the 70s we still were able to travel around the country. Once on a hot afternoon of hiking, I was surprised to hear my dad tell my brother it was OK to toss his empty pop can out the window. Back in the US the Give and Hoot and Don’t Pollute campaign was in full swing. Cranking down the window and throwing sandwich wrappers and whatnot out onto the freeway was not permitted. Littering on the dry open savannah seemed equally gauche.
But my dad explained that what was garbage to us was a useful tool for someone on the arid plains of the Awash Valley. Sure enough, as our car sped down the road and the can bound off the asphalt and into the red-tinted ditch, a young boy appeared. He chased down the empty can and took it with him. The can which was a consumer receptacle for my brother was transformed into a club good used to bring water to a family. An action that was a negative externality in the US created a spillover effect in Ethiopia.
Here are some other examples of easy-to-see transformations of goods and services from very private applications to public ones.
- An attorney is paid as such during his day job- private gain to him. He also uses his skills to save his homeowners association in a legal matter- club gain to his neighbors.
- Bell Labs paid their employees a salary and gained privately for their work. The extent of the technological advances spilled over and created advancements in many industries for a public win.
- Platforms use the internet to connect communities so they may engage in commerce for private gain, ex Uber, and AirB&B. The platform also acts as a regulator determining the acceptable forms of behavior, serving as a club good for all those who venture onto their platform.
In traditional economic analysis goods and services are stagnant. The problems assume an isolated environment where the players interact just within the realm of the examples. The relationship and nature of the products identify only in the context described. There is a depth and richness to be found if- Voilà- you see how things are transformed.